Saudi crown prince grapples with the limits of his power

Key Points:

• Saudi Crown Prince Mohammed bin Salman (MBS) is facing significant challenges as Saudi Arabia grapples with a widening budget deficit, scaled-back investment projects, and diminishing momentum from earlier economic and social reforms.
• The ongoing Iran war and related regional conflicts have created a perfect storm, causing a global energy shock, regional security crises, and worsening domestic economic conditions that limit MBS's influence.
• Attacks on key shipping routes have temporarily boosted oil prices but damaged the Gulf's reputation as a reliable energy supplier, potentially accelerating global shifts toward alternative energy sources and renewables.
• Security threats from the Houthis and regional instability are deterring foreign investment and tourism, complicating Saudi Arabia's efforts to diversify its economy and attract international capital.
• Despite large military spending and a $1 trillion US investment pledge, MBS's regional ambitions and vision for 2030 appear increasingly distant amid strained relations with the US, limited support from China, and ongoing internal and external pressures.